Jul 13, 2021
The market appears to be shrugging off all other worries in favor of the earnings outlook. Monday's market pushed the S&P 500 up another 0.35% to set another new all-time high and it looks like it will continue to go higher. The only obstacles now are the results of the second-quarter earnings season and those results started rolling in today. Reports from JPMorgan, Goldman Sachs, PepsiCo, and ConAgra brands should paint a fairly detailed picture of the broad US economy.
The risk for the market is the high expectation for results. If the average S&P 500 company fails to beat the consensus target by a wide enough margin the entire market could be in for a correction. Trading at nearly 22 times its forward earnings estimate, the S&P 500 is highly valued and ripe for a sell-off.